Think Tank See Contradicting Gov’t Policies Dragging NAIA Rehab

December 14, 2020 JUST IN

BAGUIO CITY (December 14, 2020) -Infrastructure-oriented think tank InfrawatchPH lashed at the contradictory policy directions of various government departments in implementing the Ninoy Aquino International Airport rehabilitation project.
“After last week’s bloody mess over the RFID system in Metro Manila’s tollways, the Department of Transportation should not now drop the ball in the airport sector, given the delay in NAIA rehabilitation.
Ang kailangan po rito, decisive action at pagtutulungan ng publiko at ng mga ahensya ng gobyerno.

The rehab plan has been delayed far too long,” Atty.Terry Ridon, InfrawatchPH convenor and former member of the House of Representatives’ transport committee.
Ridon said the recent correspondence by the heads of the Investment Coordination Committee (ICC), Finance Secretary Carlos Dominguez and NEDA Acting Secretary Karl Chua, to Transportation Secretary Arthur Tugade regarding the NAIA rehabilitation project “reflects a fundamental misunderstanding by department heads of pertinent public private partnership (PPP) laws and regulations.”
He believed, “the mistake in understanding ICC rules on PPP debt-equity ratio was made solely by the DoTr, when it insisted that equity requirements only relate to the initial project phase, and not to the entire project cost of PHP 107-Billion.
The agency should nonetheless be allowed to correct this mistake and ensure the correct debt-equity ratio based on the rehab’s entire project cost.”
While the ICC chiefs made the mistake in quoting implementing regulations of the Build-Operate-Transfer (BOT) Law as the basis for insisting on the specific debt-equity ratio of 70:30, as there is no mention in both law and regulations of a specific ratio, Ridon said.
InfrawatchPH reviewed all relevant laws and regulations relating to debt-equity ratio requirements for PPPs, and “there is no mention of a specific ratio to be undertaken for airport projects.”

In fact, the provision quoted by Secs. Dominguez and Chua leaves the determination of the proper debt-equity ratio to the specific agency concerned, Ridon feared. “It is precisely this type of policy stalemate that will drag NAIA’s rehabilitation beyond the term of President Rodrigo Duterte.”
Ridon urged various departments to work together to find a workable solution to fast-track the NAIA rehabilitation project.

“There is no better time to undertake needed rehabilitation work than now, given reduced passenger volume due to the coronavirus crisis.
The public will not accept that the delay in rehabilitation is due to differing interpretations of various agencies of PPP rules.”
Ridon said the transport department should require the private proponent, Megawide Construction Corporation (MCC), to comply with all the requirements relating to the award of Original Proponent Status (OPS).

“This includes complying with the ICC’s debt-equity requirement relating to the total project cost, and other relevant project commitments. This may be done through changes in MCC’s capital structure through the sale of additional shares, undertaking joint venture partners, or obtaining sufficient debt financing.”
InfrawatchPH believed any further delay in rehabilitating NAIA dooms the project during President Duterte’s term. Pushing it forward to mid-2021, one year prior to a presidential election, will make this project unviable, Ridon further claimed.
This while the recent appointment of Presidential Adviser on the Streamlining of Government Processes Sec. Leoncio Evasco Jr. should pave the way towards resolving bureaucratic bottlenecks in the PPP process, Ridon also claimed.
“If the primary stalemate on the NAIA rehab has been differing interpretations on PPP project requirements, Sec. Evasco can step in, troubleshoot and resolve these differences, because the main objective is clear: rehabilitate NAIA in the soonest time, during term of President Duterte. Government should not lose sight of this objective.”
Artemio A. Dumlao